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Fluor Reports Third Quarter 2020 Results

Source: www.gulfoilandgas.com 12/10/2020, Location: North America

Fluor Corporation announced financial results for its quarter ended September 30, 2020. Revenue for the quarter was $3.8 billion and net earnings from continuing operations attributable to Fluor was $19 million, or $0.14 per share. Consolidated segment profit for the quarter was $129 million compared to $79 million a year ago. Operating cash flow in the quarter was $80 million.

New awards for the third quarter were $1.7 billion and ending backlog was $27.8 billion. Corporate general and administrative expenses for the quarter were $68 million which included foreign currency transaction losses of $30 million and investigation expenses of $19 million in the quarter.

“With today’s 10-Q filing, Fluor is now current with its financials,” said Carlos Hernandez, Fluor’s chief executive officer, “While 2020 has provided a lot of unexpected challenges for our business, we are pleased to report that for the third consecutive quarter, we have had no material project execution charges.”

Outlook
Although Fluor has suspended its guidance for 2020, the company expects to report fourth quarter results and 2021 guidance to the investment community in February 2021. The company expects its cash balance to remain around $2 billion through the end of the year. COVID-19 continues to impact our business as clients are deferring capital investment decisions and the pandemic has slowed down our ability to fully staff and execute projects.

Business Segments
The Energy & Chemicals segment reported profit of $95 million in the third quarter of 2020 up from $85 million in the third quarter of 2019. Segment profit for the quarter improved primarily due to increased activity on a liquefied natural gas project and favorable foreign currency transaction gains. New awards were $141 million and backlog is $11.6 billion.

The Mining & Industrial segment reported profit of $18 million in the third quarter of 2020 compared to $57 million in the third quarter of 2019. Revenue and segment profit in the quarter decreased due to deferred execution activities on a few large mining projects due to COVID-19. New awards were $268 million including the influenza and antivenom cell culture facility in Australia for Seqirus. Third quarter ending backlog is $4.8 billion.

The Infrastructure & Power segment reported profit of $6 million in the third quarter of 2020 compared to $1 million in the third quarter of 2019. Lower margin contributions from certain infrastructure projects for which charges were recognized during 2019 continue to adversely impact near term segment profit margin. In the third quarter, Fluor terminated its contract with the Maryland Department of Transportation for the Purple Line Project and removed the project from its backlog. New awards were $683 million including the Oak Hill Parkway for Texas Department of Transportation. Third quarter ending backlog is $5.6 billion.

The Government segment reported profit of $26 million in the third quarter of 2020, up from $22 million in the third quarter of 2019. Results include new awards of $188 million and ending backlog is $3.4 billion.

The Diversified Services segment reported a segment profit of $7 million in the third quarter of 2020 compared to $11 million in the third quarter of 2019. Stork divested EQIN, its equipment rental business in Europe, in the third quarter. New awards were $469 million in the quarter and ending backlog is $2.3 billion.

The Other segment, which is comprised of NuScale and the Radford and Warren government projects, reported a loss of $23 million in the third quarter of 2020 compared to a loss of $97 million in the third quarter of 2019. NuScale expenses in the third quarter of 2020 were $22 million. Remaining backlog in the segment is $145 million.

Discontinued Operations
Results from discontinued operations, which includes the held-for-sale AMECO equipment business, were immaterial. During the quarter, Fluor sold its AMECO Jamaica business for $18 million net of working capital and recognized a loss of $1 million. The company expects to complete the sale of the remaining AMECO business within the first half of 2021.

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